ExxonMobil (XOM) Raises Alarm Over Australia’s Gas Supply Outlook

(CTN News) – Reports that ExxonMobil Corporation XOM has issued a serious warning regarding Australia’s domestic gas supply, emphasizing the urgent need for policy stability and increased investment in the sector.

It is projected that the domestic gas supply to Australia’s southern states will decline by 44% by 2030, according to the company.

The Gippsland Basin joint venture operated by ExxonMobil emphasizes the importance of timely investments to prevent this shortage from occurring.

There is no doubt that the Gippsland Basin joint venture is the largest single gas supplier in the country’s southern region, covering New South Wales, Victoria, Tasmania, the Australian Capital Territory, and South Australia.

In spite of the fact that the Gippsland Basin is considered a pivotal part of the solution to the potential shortage of gas, the necessary final investment decisions for its development have not yet been made.

Among the regulatory challenges, ExxonMobil compares the process of obtaining drilling permits in the United States to the process in Australia, which can take up to two years, severely impeding the swift development that will meet future gas demand.

In light of the fact that one-third of the gas needed by consumers on the East Coast between 2025 and 2030 is not currently available, expedited regulatory procedures are crucial to achieving lower prices for domestic gas.

An additional key player in the industry, Senex Energy, echoed these concerns. Ian Davies, the ExxonMobil  company’s CEO, criticized the lengthy environmental approval process in Australia, which takes nearly three years to complete for new projects.

A slow investment process discourages investment, and he urged the Labor government to ensure that the nation’s resources industry remains competitive.

In order to streamline the project assessment process and eliminate bureaucratic delays, the Labor government has proposed reforms to the Environmental Protection and Biodiversity Conservation Act (“EPBC”).

The EPBC Act, however, has already been criticized as impeding significant investments due to an average approval time of 1,009 days.

Senex had ExxonMobil planned a $1 billion expansion of its Atlas project in Queensland’s Surat Basin, but halted the project due to government-imposed a cap on gas sales aimed at alleviating high energy costs for businesses and households.

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